It’s always made sense to me that we offer commission to sales reps; farming is rough work, often repetitive and their role is transactional — so the transaction should get rewarded. However, it’s not always the right approach to compensating Customer Success Reps. A sales person’s relationship management duties are different from a CSM’s. Sales reps need to gain the trust of a person only until purchase, while CSMs need to build and nurture relationships for long term value. For subscription-based businesses, Customer Success often gets grouped in with Sales because the reps are responsible for renewals. At a glance, it makes sense.
But I have a different view of our department.
While CS is revenue generating and should work closely with sales and business development, it can be detrimental to businesses to treat CSMs like sales reps.
Commission can be demotivating
It’s great when a rep closes the deal and gets the check — even the rush to win before that might be exciting to some folks. But what about a rep who doesn’t make the deal? What about a rep who is distracted by the prospect of not getting the commission check? What does their performance look like? What does their motivation look like?
Consider then a “low performing” rep who is put on a probation plan — or worse yet, knows the only end in sight is being fired? What do they do then? How hard do they work — how carefully?
As a manager, it’s our job to inspire our team. As Customer Success leads, we’re an advocate for “customer first” mindsets. Commission runs the risk of promoting a “me first” attitude, and the business suffers.
Commission-free roles leave CSMs space to think deeper about customers, strategy and business challenges, thus contributing other value aside from revenue and building them professionally. Client facing teams tend to do a lot of emotional labor not only for the customer but for the company. The added stress of “Can I make rent this month?” can break a CSM’s spirit and take away the actual passion and drive for results.
Pay is vital to the Employee Experience
It might be radical but — just pay people a fair, living wage. Customer facing teams are notoriously on the lower end of the pay scale across many organizations. I would confidently argue anyone directly facing a customer — the people who actually GIVE your business money (and collect product feedback from the users) should be on the higher end of that scale and treated as much more valuable members of the business than they usually are.
A business that claims to be customer focused should obviously highly value the team that manages their most precious relationships. Money is a great reward when given in a healthy, productive way. In addition, businesses should look to their customer-facing teams as experts on their users and implement processes that promote the importance of value outside of direct revenue. Not being in competition for “highest earner” opens the door to better collaboration and discussion around customer needs. The work CS departments do brings in cash, but the data CS collects also contributes to growth (which, in turn, means more cash).
The Employee Experience affects the Customer Experience
I put the term “low performing” in quotes earlier because not meeting renewal quota doesn’t mean a CSM isn’t good at Customer Success. It could very well be that their customers love them but the pressure of making sure a customer renewed was focused around their check and not being a coach and advocate for their portfolio. Renewals are extremely important, but they’re the result of many interactions throughout the year and demand a lot of focus to be successful. Commission can sometimes render all actions outside of renewal pointless in the CSM’s mind.
If a rep is demotivated by money — should they be excluded from the chance to bring value to companies? Absolutley not. We should be able to work in places we love with products we’re passionate about and to contribute to the best of our abilities regardless of our desired pay structure.
I normally negotiate out of commission several times because I know it harms my production instead of enhancing it. I’m motivated by solving problems and directly contributing to business growth. When I’m fairly paid, I’m excited to make positive change in customer climate, behavior and success. As a manager, I seek to instill that passion on to my teams. Understanding how their role helps the company grow helps an employee see clearly how their current job will advance their career — making them more loyal and motivated and boosting the company culture.
Again, some people love commission. But pay is not a “one size fits all” deal.